GENERAL goods retailer Edcon says it is going to acquire clothing chain Topics for an undisclosed sum.

The deal comes after Topics was sold three years ago by retail holding company Wooltru to a consortium led by Tuan Marais and Leonard Abel for only R13m, as part of Wooltru's unbundling.

Topics consists of 125 stores, has about 200000 regular customers and turnover of R320m a year.

Pending approval from the competition authorities, and a due diligence investigation, the deal will be effective from May 29.

While no figure was given for the deal, Topics had a book value of R47,9m and a net asset value of R100,8m when Wooltru sold it off.

When Wooltru disposed of the group, it was not performing well.

Topics made a loss of R28m in the year to June 2001 against a profit of R7m in 2000 and a profit of R32m in 1999.

Topics MD Clive Richards declined to say how the group had performed since being sold by Wooltru. But Andisa Securities analyst Evan Walker said there were indications it was doing a lot better.

Former Woolworths executive chairman Syd Muller's involvement as shareholder and in the running of Topics is credited with playing a big part in turning the chain around.

Richards said he was likely to stay at Topics once Edcon took over, but Muller would leave the group.

Walker said the deal made sense for Edcon as it could grant credit to the 200000 people who shop at Topics something Topics was currently wary of doing.

Another retail analyst, who did not want to be named, said he did not expect the competition authorities to sink the deal since Topics was a small chain.

Walker said that given Edcon's large size, buying smaller chains was one of the few expansion avenues left open to the company.